Author: Anthony Pompliano, Founder of Professional Capital Management; Translated by: Jinse Finance
It is rumored that the White House will have President Trump sign an executive order late on the evening of August 7th local time, allowing individuals to purchase Bitcoin and cryptocurrencies in their 401(k) retirement accounts. This is a huge breakthrough for the cryptocurrency industry that should have been realized long ago.
It is estimated that the total funds in all US retirement accounts are approximately $43 trillion, including about $9 trillion in 401(k) accounts. In comparison, the entire cryptocurrency industry's market value is less than $4 trillion, so this executive order will open up a massive pool of funds flowing into Bitcoin and cryptocurrency assets.
Now many people will complain about the White House's approach. They will claim that Bitcoin is risky. They will scream about how inappropriate it is to give individuals the right to allocate their retirement funds as they see fit.
But this is completely nonsense. First, every American should be allowed to spend their money as they wish. What right does the government have to tell you how to use your money? If you want to invest in a new company, go ahead. If you want to invest in Bitcoin, no politician or regulatory body should stop you.
For critics, your job is not to prevent people from using their money as they wish. Your task is to strengthen financial education in the United States so that people can make wise, rational decisions. If you don't want people to gamble, explain the high loss rates to them. If you don't want them to speculate on penny stocks, explain the benefits of long-term compound returns on quality assets.
The era of treating American citizens like fools is long gone. Savvy, self-directed retail investors are rising. Many of them even outperform institutional investors. Will people make mistakes and make wrong decisions? Of course. But that is also a path to learning.
We must restore personal responsibility. We do not need a maternal state to micromanage our people's personal portfolios.
In fact, if critics really want to speak up for an important cause, they should start questioning why so many US retirement accounts are used to hold US Treasury bonds. These assets are essentially destined to depreciate in the long term, while retirement accounts are reportedly optimized to prevent depreciation. So, if we are willing to let people invest retirement accounts in high-risk US Treasury bonds, why can't they buy Bitcoin?
For example, the iShares 20+ Year Treasury Bond ETF has shrunk nearly 50% in the past 5 years. Outdated financial advisors are destroying baby boomer portfolios with outdated 60/40 portfolio allocations.
In the long run, US Treasury bonds will only fall, while Bitcoin will only rise. So, release the potential of retirement accounts. Restore freedom. Let investors have the opportunity to save themselves from the impending financial disaster under the constraints of only being able to allocate past "safe" investments.
These investors need an investment opportunity because the US dollar is being destroyed. Peter Mallouk of Creative Planning wrote: "In the past 50 years, the purchasing power of US consumers has dropped by more than 83%. Meanwhile, even accounting for inflation, the S&P 500 has risen more than 150 times. Why you need to invest..."
This is not rocket science. People just need to try to escape this crazy monetary depreciation.
Mike Novogratz of Galaxy appeared on CNBC early in the morning, explaining the significance of opening retirement account markets to Bitcoin and cryptocurrencies.
Trump came out last night talking about crypto assets being eligible for 401k. I mean, that's a huge capital pool... The window for buying cryptocurrencies is continuously expanding... And prices are determined at the margin, just think about what happens when hundreds of millions of dollars of new funds flow in every day.
Bitcoin is digital gold. It is a hedge against endless money printing and a hedge against the world's endless bad fiscal policies.
As long as governments can't spend less than their income, you will continue to see Bitcoin appreciate.
So, ladies and gentlemen, dig in! Critics are fuming, but they are on the wrong side of history. Bitcoin and cryptocurrencies will continue to exist. Now, they are about to enter your retirement accounts.
